Rs85 billion revenue shortfall recorded in January

ISLAMABAD: The Federal Board of Revenue (FBR) has recorded a massive revenue shortfall of Rs85 billion in January, collecting Rs872bn against the target of Rs957bn.

According to provisional data released on Friday, the tax collecting authority also missed its revenue collection target of Rs468 billion in the first seven months (July-Jan) period of the current fiscal year.

The overall tax collected between July and January of the current fiscal year reached Rs6.497 trillion, missing the assigned target of Rs6.965 trillion in the said period. However, the collection is 26 percent higher than the year-ago figure of Rs5.143tr.

The revenue shortfall comes ahead of the IMF team’s visit to Islamabad in late February or early March when the global lender will conduct the first economic review under the 37-month $7bn Extended Fund Facility.

The shortfall is largely attributed to reduced tax collection from imports, sluggish manufacturing growth, and lower-than-expected inflation, which has dropped to single digits in recent months.

The government’s overly ambitious revenue target of Rs12.913tr for FY25, a 40pc increase from FY24, is now backfiring. The refusal to cut expenses and the unexpected hike in the revenue target make it seem nearly impossible to achieve.